Maintaining accurate information for a financial account can be tedious and time-consuming. Using a personal checking account as an example, the account holder must usually enter each transaction (e.g., a check, deposit, ATM withdrawal, etc.) into a record of some type, such as a checkbook register or a ledger. This information recorded by the account holder must then be periodically reconciled against the records of the bank or other institution providing the account, commonly called balancing the checkbook. This reconciliation typically involves comparing entries made by the account holder in a check register or other record with a bank statement listing transactions that have “cleared” the bank (i.e., have been processed by the bank), as well as with the account balance shown in the bank's records. In many cases, often because of failure to record all transactions and/or mistakes in recording transactions, there is not a perfect correlation between the data in the account holder's records and the bank statement. Any conflicts between the two records must then be resolved, and the two records synchronized. If the account holder's records are not periodically reconciled against the financial institution's records, he or she will not have an accurate understanding of his or her finances, and risks being overdrawn or other unpleasant consequences.
Home computers and other types of electronic data storage and processing devices have been used to automate some of this record keeping. One of the first steps was moving the account holder records from a paper check register or similar document into a home computer or other similar device. Although offering advantages over a pure paper system, this alone does not significantly alleviate the problems associated with periodic account reconciliation. In particular, if the account statement from the bank or other financial institution is still in paper form, reconciling the account holder's records and the bank records remains essentially the same process. The only difference is that instead of placing marks or other indicia in a check register or other paper document to indicate that a check or other transaction has cleared the bank, and/or agreement with the bank's description of the transaction or resulting account balance, the account holder simply revises an electronic check register based on a paper account statement. Moreover, until the account holder reconciles the account statement with the electronic check register, information from the statement cannot be used in the account holder's financial decision-making.
Receiving account information electronically is also known. Instead of receiving a paper account statement in the mail, the account statement can be periodically downloaded into a home (or other) computer, and that downloaded statement then compared to data input by the account holder. This fails to solve many problems associated with account reconciliation, however. In particular, most account holders do not wish to rely solely on a bank's account records, and there remains a need to periodically reconcile account holder (customer) records and account provider (bank) records. Traditionally, personal finance software has kept user-entered account data and electronic bank statement data separate. In order to reconcile the two data sources (i.e., to “balance” the account), a special tool is implemented. This often involves calling a separate subroutine or program to combine the two data sources and permit the account holder to resolve conflicts. This also presents problems. The account holder must know to use this tool, and how to use the tool, to take advantage of the downloaded data. The account holder must also traverse between the transaction register and this reconciliation tool in order to compare possible entries and see if duplication has occurred. Furthermore, other components of the software (e.g., budgeting, etc.) cannot use the newly acquired data until these steps are performed. Even if both the bank statement and the check register are in electronic form, data in the bank statement is not used in the account holder's financial decision-making until the account holder initiates the reconciliation process.
U.S. Pat. No. 6,006,204, titled “Correlating Transaction Records Via User-Specified Identifier Creating Uncleared Transaction,” discloses a method whereby an account holder is able to create records of uncleared transactions in a financial institution's account ledger. The uncleared transaction record is treated as an account comment, but the account balance is not modified until the transaction actually clears. For this and other reasons, this patent fails to solve many of the problems described above.